KUALA LUMPUR: Malaysian palm oil futures rallied more than 5% on Monday to hit a more than three-month high, tracking a sharp rally in rival soyoil on concerns over smaller U.S. planting and inventories.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed up 196 ringgit, or 5.17%, to 3,985 ringgit ($854.23) a metric ton. The contract rose for a third session to its highest closing since March 15.
Palm oil ends higher to clock first monthly surge in four
Palm oil is getting a much-needed support from soy oil amidst slower exports from Malaysia and some uptick in production since May, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Exports of Malaysian palm oil products for June fell 6.9%, cargo surveyor Intertek Testing Services said on Friday. Another cargo surveyor, AmSpec Agri Malaysia, said exports rose 0.6%.
The U.S. Department of Agriculture (USDA) on Friday reported much lower-than-expected 2023 soy plantings and June 1 inventories, raising concerns over world supplies and triggering a rally in soybean and soyoil prices.
Soyoil prices on the Chicago Board of Trade rose 1.7%, extending a 7.3% rally in the previous session. Dalian’s most-active soyoil contract rose 6%, while its palm oil contract gained 4.9%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Russia’s envoy to the United Nations in Geneva said there were no grounds to maintain the “status quo” of the Black Sea grain deal that is set to expire on July 18, the Russian news outlet Izvestia reported on Monday.
India is likely to receive an average amount of rain in July despite the likely emergence of the El Nino weather pattern, a senior weather department official said, encouraging farmers to accelerate crop planting which has progressed slowly due to patchy rains in June.
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